The star investor blamed "brutal" market conditions for the dire performance of Fidelity's China Special Situations - the publicly-listed fund he came out of retirement to launch.

In a regulatory statement Mr Bolton, who was once nicked-named the 'City's Silent Assassin' for his ability to overthrow company bosses, said he was "sorry to report" that difficult markets, his choice of volatile stocks and the fund's high leverage had "produced some very poor performance figures."

The fund, which was one of the biggest investment trust launches when it raised £430m in April 2010, was down 28.9pc in the six months between March and September this year. The benchmark MSCI's China Index was down 24.5pc. In its first year the fund lost 15pc. The shares have fallen 32pc this year.

John Owen, chairman, said the results were "unsatisfactory" but that the board remained confident in Mr Bolton's strategy.

Mr Bolton admitted his bet on booming growth in China had gone wrong. "My optimism on markets generally and China specifically has been severely tested," he said. He added: "I have been wrong so far in my expectation that China's stock market could de-couple from the West."

However he appeared to blame other investors, as well as the economy. He said: "The number of commentators looking for a hard landing in China has increased over the last few months. This together with negative views about the property market and the unofficial lending market has led to Chinese shares performing worse than those in other markets."

The veteran investor, who is highly regarded for his long-term management of Fidelity's Special Situations fund, said it was "as difficult a time to be running money as I can remember." He added: "I can only assure shareholders that I will make the upmost [SIC] effort to reverse the recent under performance of the company's assets and in turn of the share price."